US stocks advanced on Monday as the bull market celebrated its sixth anniversary. The S&P 500 gained 0.4%. The stocks rose after 1.6 % fall in S&P 500 last week as better than expected job report fueled market participants' expectation that the Federal Reserve will raise the interest rates in June. The US stock market crashed in March 2009 and lost more than half its value from the peak in October 2007. It has more than tripled in value since then supported by the Federal Reserve’s quantitative easing program. The dollar weakened Monday as investors bought back cheap pounds and euros after they fell sharply on Friday. Today at 14:00 CET the National Federation of Independent Businesses February Small Business Index will be released in US. At 15:00 CET the January Job Openings and Labor Turnover Summary will be released by the Labor Department. At the same time the January Wholesale Inventories will be published. The tentative outlook is positive for the dollar.
European stocks fell on Monday as the European Central Bank started its bond buying program involving monthly purchases of 60 billion euros ($65 billion) worth of bonds, and the euro area finance ministers said Greece’s proposals submitted to international creditors to avert a default fell short of what was put forward two weeks ago. The Stoxx Europe 600 ended 0.3% lower. Investors took profits after market rallies since the start of the year in anticipation of the ECB quantitative easing program lifted FTSEurofirst 300 more than 14 percent. The Greece’s Finance Minister Yanis Varoufakis said on the weekend that Greece may hold a referendum on whether to accept its creditors’ financial-aid terms if the government decides they are unacceptable.
Nikkei recorded the sharpest fall in a month on Monday as data showed the GDP grew slower than previously estimated in the fourth quarter of last year. Nikkei is rising today as yen weakens further against dollar, which boosted shares of auto exporters such as Honda Motors Co and Toyota Motors Corp.
Data released in China today indicated the consumer price inflation in February rose faster than expected while producer prices fell 4.8 percent, driven by weaker commodity prices. The rise in consumer prices is mostly attributed to increases in food and transportation costs in Chinese New Year effect, and market participants expect the People’s Bank of China will cut benchmark deposit and lending rates again next quarter as the economy slows.
Oil prices inched higher on Monday after dropping sharply last week due to stronger dollar and rising US supplies. While stronger dollar weighs on commodity prices, market participants expect the demand for oil will expand as world economic growth recovers on the back of stimulus programs adopted by many monetary authorities and US growth continues. The trade data for February released in China indicated that the world’s second largest economy’s crude oil imports during the month rose 11% on year to 25.55 million tons. Goldman Sachs report on Monday indicated that while the company expected oil futures to stay low longer its earlier forecast for $40 oil may be too low.
Natural gas prices dropped as the weather forecast predicted above normal temperatures across much of US.
Gold prices rose for the first time this month as Greece’s reform proposal in return of the bailout extension was deemed insufficient by Eurogroup.